TORONTO, April 16 (Reuters) - A steep drop in the price of gold will hit profits at mining companies that are already straining under rising costs, and could prompt some miners to rethink their capital spending.

Gold companies big and small sold off on Monday and Tuesday as the prospect of central bank gold sales and fears that the U.S. might reduce monetary stimulus tipped spot gold prices off a ledge, to a more than two-year low around $1,300 an ounce.

While lower prices are not likely to wipe out miners’ profits, they will squeeze cash flows as companies are still feeling the impact of pricey acquisitions made at the height of the commodity cycle.

“Everybody was enjoying the high tide, and now that the tide is coming down you’re seeing who’s swimming naked, and the thing is, everybody’s swimming naked,” said Veritas Investment Research analyst Pawel Rajszel, who is broadly negative on the sector.

The S&P/TSX Global Gold index ended down 9.3 percent on Monday after touching its lowest point since late 2008.

Canada’s Barrick Gold Corp, which was forced to suspend construction on the Chilean side of its huge Pascua-Lama gold and silver mine last week over environmental concerns, dropped 10.4 percent to C$20.55 on the Toronto Stock Exchange.

But rival Goldcorp Inc was down a comparatively modest 4.7 percent at C$28.66.

The largest declines hit small and intermediate companies, which typically have less flexibility to focus exclusively on high-quality assets than major producers.

Evolution Mining, which owns five gold and silver mines in Australia, sank 17 percent on Tuesday on the Australian Securities Exchange, while Alacer Gold, with gold mines in Turkey and Australia, slid 10 percent.

ANALYSTS SPLIT ON MAJORS

The bullion price drop comes as gold miners try to win back investors turned off by a series of disappointing acquisitions, vowing to clamp down on costs and focus on shareholder returns rather than on growth.

Morningstar analyst Elizabeth Collins said she estimates that many producers’ costs are well below $1,400 per ounce. But investor pressure to maintain positive free cash flow may prompt some companies to slow capital spending.

“It will just be a general sense of ‘hey, we don’t want to be free-cash-flow negative year after year’,” she said. “‘Even if this project makes economic sense ... we’re just going to slow down our spending.'”

But others are more downbeat.

National Bank Financial analyst Paolo Lostritto said it is difficult to know for sure how much capital spending is discretionary, but he’s not optimistic.

“We would argue that there’s quite a few companies that are losing money at this gold price,” he said.

Lower prices could also hit dividends, especially those paid by miners with policies that link payouts to the price of gold, like Newmont Mining Corp and Eldorado Gold Corp . Newmont’s last quarterly dividend was $0.425 a share, and Eldorado’s last semi-annual dividend was C$0.07 a share.

JUNIORS TUMBLE

Many of the largest percentage stock price declines were among smaller players, like Gabriel Resources Ltd, which is waiting on permits for its Rosia Montana gold and silver project in Romania. Its shares slumped 23.4 percent to C$1.51.

Detour Gold Corp, which is ramping up its first mine, in northeastern Ontario, dropped 21.9 percent to C$11.48.

Rajszel said intermediate producer Iamgold Corp could also be hit particularly hard, as by his estimates their costs will be around $1,400 per ounce this year, but he noted that the company had plenty of cash. Iamgold’s stock fell 7.2 percent to C$5.43.

With gold prices plunging, miners that hedged some production despite coming under fire from investors for not having been fully exposed to gains during the bull market, were feeling vindicated.

“In times like this when prices are going down, it (hedging) gives us good support,” Russell Middleton, chief financial officer at Australia’s Hillgrove Resources, told Reuters.

Hillgrove produces gold and copper at a mine in South Australia, where its gold output is effectively hedged at around A$1,500 an ounce.

In contrast with some other small miners in Australia, Hillgrove shares fell only 4.5 percent on Tuesday.

Perseus Mining, which has 216,000 ounces of production from its Edikan gold mine in Ghana hedged to the end of 2015 at $1,373 an ounce, also held up better than most of its peers, falling only 3.6 percent.